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Advisers to the private equity industry are joining calls for a new and better approach to benchmarking investment performance.

Writing in this week’s edition of Private Equity News, Jeremy Hocter, head of product management at Pevara – part of fund administrator eFront – said measuring the performance of private equity funds presented investors with a “significant challenge” http://bit.ly/XqBWV8.

He said this was because the different techniques used by different funds meant that investors were limited to broad peer group comparisons, which was problematic as funds will focus on different areas.

Hocter said: “It is essential to compare like with like, rather than relying on generic, broad-based comparisons. To achieve this, a new tool kit is required that enhances the capture, manipulation and analysis of data. This can be achieved through custom-weighted benchmarks that mirror the allocation of multiple strategies, regions and vintages found in a specific fund or portfolio.”

Pevara has an interest in pushing for investors to set up such models as it specialises in benchmarking private equity performance, but Hocter's comments feed into the wider debate about the difficulties investors have in fairly assessing asset valuations because of the lack of an industry standard model.

Private equity advisory firm Altius Associates believes addressing calls for standardised reporting is one of the top 10 challenges facing the private equity industry. John Hess, chief executive of Altius, said: "Anything that helps investors understand what GPs [firms] are doing and enables better comparison is good. The top [performing] GPs are happy to do it, but any that are lower down probably don't want to."

Rajesh Mehmi, a principal at industry adviser Altius Associates, said investors had taken a much greater interest in the topic in recent years: "Since the financial crisis there has been interest in benchmarking against the public markets, which may have something to do with investors deciding on allocations [to the asset class]."

Richard Watkins, a partner at law firm Kirkland & Ellis, said investors needed to act as one if they were ever to see significant changes in reporting practices at fund managers. He said: "If the initiative really had broad support of institutional investors it would happen. If they are not all on board there is little value in the debate."